Heparan sulfate proteoglycans (HSPGs), which are composed of a protein core attached to Glycosaminoglycan (GAG) chains, have been implicated in a number of cellular processes such as cell adhesion, motility, proliferation, and differentiation. Although HSPGs represent one of the major classes of cell surface molecules, their actual roles and specificities are poorly understood. Recently, the critical roles of HSPGs in developmental processes and specific signaling pathways have been illustrated by the identification of a number of mutations in genes involved in HSPG biosynthesis. In Drosophila, mutations in enzymes that generate or modify the GAG chains, exhibit phenotypes reminiscent of loss of Wingless (Wg), Fibroblast Growth Factor (FGF) and/or Hedgehog (Hh) activities. Intriguingly, specific signaling pathways appear to be disrupted by mutations in some of the enzymes involved in GAG chain formation, as well as in genes that encode the protein cores. Our hypothesis is that HSPGs play specific roles in ligand/receptor interactions as well as distribution on extra cellular signals. To gain insight into the function and specificity of these molecules during signaling, we will analyze the roles of both the enzymes involved in biosynthesis of the GAG chains, as well as the protein cores encoded by Syndecan and Glypicans (Dally and K-Glypican). Using genetic, cell biological and biochemical studies, we propose to: identify the protein core of the HSPG involved in Hh signaling; elucidate of the HSPG involved in Hh signaling, determine the basis of the specificity of Tout velu/Ext glycosyltransferase to Hh signaling; elucidate how Dally co- operates with Wg and its receptor, Dfz2; demonstrate that Syndecan encodes the HSPG involved in FGF signaling; elucidate how ally co- operates with Wg and its receptor, Dfz2; demonstrate that Syndecan encodes the HSPG involved in FGF signaling; and characterize additional enzymes that synthesize HSPGs. Altogether, our analyses of HSPGs will elucidate the function of HSPGs in a number of signaling pathways that play major roles in developmental processes. Because these pathways have also been implicated in various disease stages; e.g., oncogenesis, our studies may lead to novel ways to modulate specifically the activity of these signaling pathways.